Diamond geezer back in hunt with African prospectBarry FitzGerald January 26, 2009 Page 1 of 2 Single page view
THE July 2007 takeover of Harley-riding Miles Kennedy's Kimberley Diamond Company by London-listed Gem Diamonds was something of an emotional turning point for those that followed the fortunes of what was Australia's only independent listed diamond producer.
The $340 million deal marked the end of a tough period for Kimberley, which managed to bring the Ellendale diamond field into production but then had to contend with the twin pains of rising costs and a rapidly appreciating dollar.
Kennedy, the South African-born mining entrepreneur who steered Kimberley through some rough seas, can at least look back with some satisfaction on the deal, which delivered his original backers a decent return on their investment.
One thing Kennedy knows more than most is that world-class diamond fields are few and far between — which is why Gem Diamonds swooped on Ellendale in the first place.
Kennedy is nevertheless back in the diamond hunt, having recently resurfaced as chief executive of Lonrho Mining Limited (ASX: LOM), a Perth-based explorer with an interesting suite of diamond assets in southern Africa and a colourful past.
Kennedy and his former Kimberley co-director, John Firth, were approached to take over the reins at Lonrho, previously called Nare Diamonds, late last year. They have wasted little time in getting to grips with what Kennedy regards as the jewel in the crown of the company's assortment of alluvial and kimberlite prospects in southern Africa — the Lulo diamond project in Angola.
Lulo is a 3000-square-kilometre concession that covers the eastern margin of the Cuango River catchment area, some 650 kilometres east of Luanda. It's not exactly Garimpeiro's favourite part of the world but it is a must-be-there location if you're serious about diamonds.
As with all diamond exploration ventures in Angola, Lonhro has a joint venture with Endiama, the national diamond company, under which it will ultimately hold a 30 per cent interest in any kimberlite deposits discovered and developed.
Lonhro ran high-resolution geophysics over the concession last year, successfully defining no less than 217 anomalies with the potential to be kimberlite pipes and/or kimberlite/magma blows. It's very early days.
But Kennedy and his technical team of diamond boffins are right to be getting excited over the initial sampling results from testing of the first handful of targets.
Lonrho told the market on Friday that it had confirmed at least one kimberlite discovery from field-based exploration and had collected "very high" levels of kimberlitic indicator minerals from all six of the targets sampled last month.
"While clearly early stage, these results bear all the hallmarks of first pass exploration within a substantial diamond field with genuine potential to host multiple kimberlite pipes," Lonrho said after digesting reports from its technical experts.
On a dark day for the market, Lonhro shares tickled up 0.9 of a cent to close at 4¢. That was a gain of 29 per cent, as good an indication as you will get that there is life in the junior sector despite the generally miserable times for equity markets.
Having said that, we're are talking about a sector that has been gutted in the past six months. It wasn't all that long ago that Lonrho was a 35¢ stock. Ouch.
LOM Price at posting:
3.4¢ Sentiment: Hold Disclosure: Held
